Wednesday, December 2, 2015

Myzled on Obamacare Schadenfreude

UnitedHealth CEO Stephen Hemsley seems to imply just that: “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

Mind you, UnitedHealth was a huge backer of the 2009 law. One of its top execs, Andrew Slavitt, then joined the administration to run the health exchanges.

What’s going on here? Basically, the long-feared “death spiral”: Not enough young, healthy folks are signing up for these plans, so insurers are losing money despite the hefty federal subsidies for the coverage. They’re raising premiums to even things out — but that drives even more folks away, so that only older, less-healthy customers remain, driving new losses . . .

Looking at the collapse of the ObamaCare “cooperatives” a few weeks back, Betsy McCaughey warned in these pages that the death spiral was under way.

Now here’s America’s biggest insurance provider saying pretty much the same thing. Hemsley cited weak enrollment and high medical costs for those who did sign up.

Middle class customers without major health problems look askance at the high premiums. They may also stop paying for insurance after they realize that their premiums are being kept lower than they would be otherwise by high deductibles and narrow networks. Even the controversial requirement that everyone buy insurance under penalty of law has failed to attract these customers.

As a result, there aren’t enough net-payers into the pool to cover the healthcare costs of the others. Insurance companies are begging for a bailout. Although it is not a certainty, the threat of the so-called "death spiral" still remains.

The good news? Repeal looks more politically feasible, more attractive, and even more likely to attract at least some Democratic support every day this goes on. When Obama leaves office, more than half of the 60 Democratic senators who voted for it will have retired or been defeated. The party will have much less invested in defending it against common sense, as it has done now for seven grim years. . .

If so, it was a remarkably mundane demand that punctured the ObamaCare balloon. Two years ago, Marco Rubio won a fight during the budget battles to include a requirement for HHS to maintain budget neutrality in its risk-corridor programs. Rubio had pushed back against this program for months, claiming — as it happens, accurately — that it was a back-door bailout of the insurance companies that had cooperated in the effort to pass ObamaCare. Instead of allowing HHS to dip into general funds for risk-corridor payments, Rubio’s rider restricted those payouts to funds collected from taxes on insurers.

The move forced HHS to cut expected risk corridor payments to pennies on the dollar, and prompted the closure of more than half of the co-ops launched by HHS to provide supposedly low-cost coverage. Now that United Healthcare has signaled that it may cut its losses and get out of the ObamaCare market, The Hill credits Rubio with starting the death spiral many predicted when Democrats first passed ObamaCare in March 2010:

The risk corridors program was designed to be a temporary stopgap against high insurance claims during the first three years of the new federal program.
. . .
The Obama administration disclosed it could only afford to pay 13 cents of every dollar owed to the insurance companies — after insurers had already locked in their rates for the upcoming year. …
Within weeks, about a dozen start-up insurers known as CO-OPs announced they’d be shutting their doors, in most cases because they lacked the cash flow to stay solvent. And at least two other insurers — WinHealth Partners in Wyoming and Moda Health in Washington — pulled out of the exchanges.

At the time, no one was under any illusions about Rubio’s intent, either. Allahpundit pointed out almost immediately that it would accelerate the death spiral, thanks to a lack of ability for government to prevent it. Business Week noted that Rubio’s bill went beyond merely limiting the risk corridor payouts to handcuffing HHS to keep it from rescuing insurers. By May 2014, the threat was sufficient that the White House pledged to find more funding for risk corridor payouts. Peter Suderman sounded skeptical about the prospects for additional funding, and Suderman turned out to be right, as events have shown in the past several weeks.

Back in the middle of November we covered the announcement that one of the largest New York health insurance providers under the Obamacare co-op umbrella was in trouble. Health Republic had jumped on the Affordable Care Act bandwagon and signed up nearly a quarter million new subscribers, offering cut rate prices and surging to the top of the market in that area. Unfortunately, the expected cash bonanza from the government program failed to live up to expectations and the company quickly ran out of operating capital. Yesterday was the end of the line for Health Republic and they closed their doors.

Unfortunately for the citizens of New York, this failure didn’t just represent a blow to the company’s profits and the reputation of the White House’s signature legislative achievement. There have been real world consequences for the people who signed up for the plan, including running into doctors who won’t even accept appointments from people using the company’s services. (From The Watershed Post)

The shuttered company is no longer paying its claims, leaving doctors unsure whether they will ever be paid for seeing Health Republic patients. Some doctors have turned patients away, or are bargaining directly with patients over their medical fees…
Health Republic’s collapse has forced a panicked scramble among patients and doctors in upstate New York. Local doctors have worried that Health Republic will default on bills, and at least one practice, the Llobet Medical Group, has turned away patients who have Health Republic insurance.
“This was one of the biggest disasters ever,” said David Cordner, an administrator at Llobet Medical Group, a primary care practice with offices in Margaretville and Kingston. “I don’t understand why New York didn’t see this a lot sooner. Nobody got paid. Where was the money going?”

Where was the money going? Several New York legislators are asking exactly that question since a lot of taxpayer dollars were flushed down this rat hole before it was finally closed. Health Republic had received $265 million in federal loans to get started and that money has pretty much evaporated. Two state senators along with U.S. Congressman Chris Gibson have called for an investigation and are asking Governor Andrew Cuomo to explain where the money went and what he plans to do to ensure this doesn’t happen again.

The CEO of UnitedHealthCare on Tuesday said he regretted the decision to enter the ObamaCare marketplace last year, which the company says has resulted in millions of dollars in losses. “It was for us a bad decision,” UnitedHealth CEO Stephen Hemsley said at an investor’s meeting in New York, according to Bloomberg Business.

UnitedHealth, the country’s largest insurer, announced last month that it would no longer advertise its ObamaCare plans over the next year and may pull out completely in 2016 — a move that sent shockwaves across the healthcare sector.

Hemsley’s remarks double down on his earlier warning that the ObamaCare exchanges remain weaker than expected after two years and that it will take far longer for insurers to profit from the millions of new enrollees.

The company had already eyed ObamaCare’s federal marketplace cautiously since it launched in 2013. UnitedHealth only began selling plans on the exchanges last year. Now, UnitedHealth officials have said that move will result in a half-billion dollars in losses over two years.

Officials with the Department of Veterans Affairs spent millions of taxpayer dollars promoting the Affordable Care Act to veterans who didn't even need the coverage, but have dedicated relatively few resources to helping veterans on the agency's long waiting list get access to their benefits, internal documents show.

The VA spent $6.125 million on brochures, letters and posters in an outreach campaign for Obamacare that ended last year, according to internal reports obtained by the Washington Examiner.

Scott Davis, a program specialist at the Atlanta VA enrollment center, said the VA likely spent much more than that on the Obamacare promotion campaign, given that the Atlanta enrollment center hired at least 40 additional staffers to push the health care legislation. Records indicate the VA also spent money on Google advertisements, Spanish-language promotional materials and videos in an effort to spread the word about Obamacare.

If you’re at risk of prostate cancer — in other words, if you’re male — the best place to be is the United States, where survival rates are highest in the world. But not for long, if the Obama administration gets its way in curtailing a test that flags prostate cancer before it spreads.

The administration wants to penalize doctors who routinely order the PSA blood test. Under a proposed policy, those doctors will get demerits for being considered over-spenders, while doctors who skip the test will be rewarded with a high “quality” rating from the government — and be paid more.

The Obama administration claims less care is better. That’s double-talk. An editorial in the current issue of the Journal of the American Medical Association points to a sudden, disturbing drop in prostate-cancer detection since 2011, when the United States Preventive Services Task Force recommended against using this simple test.

Worse, the journal predicts more prostate-cancer deaths due to the drop.

The task force — 16 government appointees — tried to argue that the test does more harm than good. Some men with high PSA scores undergo retests and biopsies only to find out they don’t have cancer. Or they endure the side effects of radiation and surgery even though their cancer is slow-growing and not life-threatening.

The task force claims the test’s “harms” outweigh the “benefits.” Not so fast. Of course it’s distressing to get a call that you need to get retested because of a high PSA score, but that “harm” is nothing compared to being told you have cancer that could’ve been caught and stopped years earlier.
. . .
In truth, the Obama administration is more concerned with cutting care than preventing cancer deaths. Guided by that warped philosophy, the task force told women in their 40s not to get mammograms, and advised women 50 and over to settle for a mammogram every two years, instead of annually.

I think the value of the PSA test is over rated, but it's cheap, and relatively painless. My previous GP didn't believe in it, but my current one does. I do know at least one man whose life was probably saved by the PSA test. But it's odd that the Administration pushes a bunch of routine items for women's health for "free" coverage, while attempting to deny actual cancer diagnostic tests to men.

President Obama is being blamed for the rising price of Brooklyn pizza.

The owner of the beloved Park Slope pie and pasta joint Franny’s says the President’s signature health care law is forcing her to tack on 3% to all checks to offset the $200,000 cost of federally mandated insurance for her 50-plus employees.

“This is a cost that we cannot absorb without going out of business,” owner Francine Stephens tells the Daily News. “We’re quite sensitive to raising prices too much so we wanted to offer transparency,” she adds.

So as of this week, an $18 pasta dish is now $19 and the $18 pizza has risen to $20.

President Obama's signature health care overhaul is crumbling, and his lead from behind foreign policy is paying ominous dividends.
Good thing he has his unofficial Hollywood SuperPAC to lend him a hand.

Will Ferrell’s FunnyOrDie.com site isn’t just a repository of comedy clips. It doubles as a political weapon, a cudgel meant to smite Obama’s enemies. And yes, it’s from the same comedian who railed against money in politics via his 2012 comedy “The Campaign.”

The site roared to the president’s side in 2013 when ObamaCare officially went live on the web. The world watched a comically inept rollout that even inspired “Saturday Night Live,” which prefers to avoid memes damaging to Obama, to torch it.

Not FunnyOrDie.com. The site was too busy rolling out comic propaganda pieces extolling ObamaCare’s virtues. It actually published a video detailing how easy it was to use the ObamaCare web portal. No joke.